Australian dollar and local share market rise in first day of trade after federal election

By business reporter Pat McGrathUpdated
Mon 9 Sep 2013, 4:07 PM AEST

PhotoAFP

The Australian share market has posted modest gains in on the first day of trade after the federal election, while the Australian dollar has continued to surge ahead.

At 3:40pm (AEST), the All Ordinaries index was 0.5 per cent higher at 5,169 points, while the ASX 200 was up by the same margin to 5,170 points.

The Australian dollar was worth 91.93 US cents.

The major mining companies, which look set to benefit from the Coalition's plan to scrap the mining profits tax, were trading higher.

BHP Billiton rose by 1 per cent to $35.33, while Rio Tinto was 1.2 per cent ahead at $61.47.

The major banks were all marginally higher, with Westpac up 0.6 per cent, the Commonwealth Bank edging up by 0.4 per cent, National Australia Bank rising by 1 per cent, and ANZ adding 0.4 per cent.

The salary packing company Macmillan Shakespeare, which saw its share price plunge after Labor released plan to scrap the fringe benefit tax concession on company cars, has lost ground.

Its shares fell by 5 per cent to $12.98.

Meanwhile, the three major international credit ratings agencies have reaffirmed their AAA ratings for Australia's debt.

Standard & Poor's says its rating has not been affected by the change of government.

"In line with the Coalition’s pre-election announcements, we expect new spending measures - such as infrastructure projects and a new paid parental leave scheme - to be broadly offset by savings measures, particularly cuts to the bureaucracy and unwinding of recent policies related to household payments," it said in a statement.

"We expect the new government to shortly commission a review of government finances, which may pave the way for further spending cuts."

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The Business Council of Australia's Tony Shepherd says the change of government is likely to lift business confidence.

However, Mr Shepherd has told ABC business editor Peter Ryan that it is unclear how soon this will be met by an increase in business investment.

"They'll welcome the change, and they'll look to the future," he said.

"But whether that means they open their chequebook immediately is another matter."